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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Lurgio who wrote (1968)	7/1/1999 7:18:00 AM
From: tero kuittinen	Read Replies (1) \| Respond to of 34857

And China Unicom leads the toast parade... they just nailed a roaming agreement with China Telecom's nationwide GSM network. This one is a showstopper. Unicom is spending about 900 million dollars in CDMA networks and 2,7 billion dollars in GSM networks this year. But on top of that they now get access to the the entire China Telecom GSM network. This means there will be two nationwide GSM networks in China, both offering identical, vast coverage; combining all existing GSM infrastucture. China Unicom is concentrating its own GSM build-up in areas not covered by China Telecom - and vice versa. Then they both get the right to use each other's networks. The coverage advantage over CDMA just shot off the charts. It's a nearly unique situation - usually regulators don't want to give that kind of Christmas gifts to start-up companies at the expense of the dominant operator who spent all that money on initial network build-ups. What this amounts to is a 10 billion dollar bonus to China Unicom - that's what it would have cost it to build a GSM network equaling the present Telecom coverage. The irony here is that the news comes just after the Unicom plans of a limited CDMA build-up have been covered in about 14 identical news releases. And now the government has given the company the biggest possible financial incentive to back GSM. Like I've said before... Charlene may be a tough old cookie, but Beijing ain't Brussels. The implications for Nokia in the handset sales are good - they're now shipping about 400 000 units in China a month. That's almost exclusively to China Telecom, since Unicom has lacked the national coverage to compete for GSM customers. Precedents from Eastern Europe and North Africa show that the appearance of a second nationwide mobile operator using the same digital standard tend to accelerate handset sales. When the customers get the chance to switch operators without changing handsets the competititive environment is a lot healthier than in single-operator situations. Tero